The current system is “inherently unfair” on people living on fixed incomes and paying high rates because of the value of their properties in areas like Devonport-Takapuna, Brown says.
Introducing an income-related tax for local council services that everyone pays is an option, he says.
Only property owners pay rates but the council is spending money on infrastructure and services for everyone, Brown says.
I’ve long thought that a local income (or sales) tax could be a fairer way of funding local government than a property tax.
Arguably it would lead to greater fiscal restraint. Councils are always increasing rates without too much backlash because the average householder doesn’t know how much of the change in their rates bill is due to increased Council spending and how much due to a change in relative house values.
An actual local income tax would be much more transparent and hopefully there would be such a backlash against increasing it that Councils would then adjust expenditure to fit within their income (as central Govt does) rather than their current practice of working out everything they want to spend and then just setting rates at a high enough level to fund it.Tags: Len Brown, Rates